Which of the Following Describes a Situation in Which Every

question 228

Multiple Choice

Which of the following describes a situation in which every good or service is produced up to the point where the last unit provides a marginal benefit to consumers equal to the marginal cost of producing it?

• A) Productive efficiency
• B) Allocative efficiency
• C) Marginal efficiency
• D) Profit maximisation

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Definitions:

Producer Surplus

The disparity between the amount producers are prepared to take for a product or service and the amount they actually get.

Tariff Revenue

The income generated for a government from taxing imported goods.

Consumer Surplus

The gap between what consumers are prepared and capable of spending on a product or service versus what they actually spend.

Trade Restrictions

Measures such as tariffs, quotas, and import bans implemented by governments to control the amount and type of goods and services that can enter or leave a country.